Business tax changes

The assessment of business tax will be simplified through the modification and the different rules for different categories of small entrepreneurs will be unified. The new taxation method may be applied by small entrepreneurs whose annual sales revenue is not more than HUF 25 million and in case of retailers, it is not more than HUF 120 million. The base of the simplified business tax is differentiated in ranges according to the size of the revenue of the tax year:

What you should know:

Contractors obliged to apply the arm’s length price according to the Act on corporate tax and dividend tax shall determine the net sales revenue or net sales revenue deduction costs or expenses from a transaction with its affiliated company on the basis of the arm’s length price under the Act on corporate tax and dividend tax.  The reduction of the net sales revenue or the increase of the amount of the costs or expenses reducing the net sales revenue is subject to the condition that the contractor has a declaration from the party contracting with him that the latter has increased the net sales revenue or reduced the amount of the costs or expenses reducing the net sales revenue by the same amount in the course of the determination of the basis of assessment for business tax to which he is obliged. If the contracting party is not subject to local business tax or if the adjustment for the arm’s length prices relates to a transaction in which the consideration does not affect the amount of the contracting party’s local business tax base, his declaration must include that it has taken this adjustment into account in determining his foreign tax base corresponding to the local business tax or, failing that, the corporate tax or its foreign tax equivalent.